This strategy allows you to generate income by collecting premium, while defining your risk, aligning with a moderately bullish view, even in the face of current headwinds.
How It Works:
1. Sell a Higher Strike Put Option: You sell a put option with a strike price closer to Tesla's current market price. This generates an immediate credit or premium in your account.
2. Buy a Lower Strike Put Option: At the same time, you buy a put option with a lower strike price. This acts as an insurance policy that limits how much you can lose.
The ideal outcome is for Tesla to close above the higher strike price on the expiration date. If this happens both options expire worthless & you keep the entire net premium collected.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- glowziΒ·01-07TOPSolid approach! Bull put spreads are ace for defined risk β used them on TSLA before. [εΎζ]1Report
- icycrystalΒ·01-07TOPthanks for sharing1Report